Merit Medical Systems Inc (MMSI)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	94.47	98.37	96.46	98.31	100.48	103.32	105.46	102.18	94.70	88.65	85.05	83.83	82.15	76.16	70.93	75.05	73.68	76.68	81.61	83.86
Days of sales outstanding (DSO)	days	56.05	57.10	54.95	55.49	55.40	54.57	56.40	57.85	56.65	53.78	55.64	55.79	58.04	56.14	57.58	60.31	58.98	57.31	56.28	58.71
Number of days of payables	days	21.14	19.26	17.98	15.71	21.81	16.61	21.29	23.14	24.39	22.72	21.68	21.04	20.59	18.69	19.62	19.85	18.54	17.10	16.38	20.62
Cash conversion cycle	days	129.38	136.21	133.44	138.09	134.08	141.27	140.57	136.88	126.96	119.71	119.01	118.58	119.60	113.60	108.90	115.50	114.12	116.89	121.51	121.95

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 94.47 + 56.05 – 21.14
= 129.38

The cash conversion cycle of Merit Medical Systems Inc has shown variability over the past few years. The company's cash conversion cycle measures the average number of days it takes for the company to convert its investments in inventory and other resources into cash from sales.

The trend analysis reveals that the cash conversion cycle decreased from 121.95 days as of March 31, 2020, to 108.90 days as of June 30, 2021, demonstrating an improvement in the efficiency of the company's working capital management. However, the metric fluctuated in subsequent periods, with the cycle increasing to 141.27 days as of September 30, 2023, before declining to 129.38 days as of December 31, 2024.

During the period under review, Merit Medical Systems Inc experienced challenges in managing its working capital efficiently, leading to an increase in the cash conversion cycle. A higher cash conversion cycle may indicate that the company takes longer to convert its investment in inventory into cash, potentially impacting its liquidity and profitability.

Overall, the company should focus on enhancing its inventory management, collection of receivables, and payment of payables to shorten the cash conversion cycle, thereby improving its overall financial health and operational efficiency.